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Share-Based Compensation | 9 Months Ended
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Sep. 30, 2022
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | Share-based Compensation In April 2021, the Company adopted the 2021 Long-Term Performance Incentive Plan (“2021 Incentive Plan”). Under the 2021 Incentive Plan, the Company can grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”) and stock grants. The 2021 Incentive Plan allows for the issuance of up to 1,266,092 shares of common stock (the “Share Limit”). The Share Limit will automatically increase on January 1st of each year, during the term of the 2021 Incentive Plan, commencing on January 1 of the year following the year in which the effective date occurs, in an amount equal to four percent (4%) of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year; provided that the Board may determine that there will be no such increase or a smaller increase for any particular year. As of September 30, 2022, 546,535 shares remained available for future grants. Share-based awards generally vest over a period of one to four years, and share-based awards that lapse or are forfeited are available to be granted again. The contractual life of all share-based awards is ten years. The expiration dates of the outstanding share-based awards range from January 2028 to August 2032. The Company measures share-based awards at their grant-date fair value and records compensation expense on a straight-line basis over the service period of the awards. Share-based compensation is allocated to employees and consultants based on their respective departments. All board of directors’ compensation is charged to general and administrative expense. Share-based compensation expense related to the issuance of stock options was as follows for the three and nine months ended September 30, 2022 and 2021:
| Three months ended September 30, |  | Nine months ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Research and development | $ | 14,349 |  |  | $ | 17,775 |  |  | $ | 74,256 |  |  | $ | 56,677 |
General and administrative | 262,172 |  |  | 133,300 |  |  | 658,547 |  |  | 224,049 |
| $ | 276,521 |  |  | $ | 151,075 |  |  | $ | 732,803 |  |  | $ | 280,726 |
The weighted average assumptions used in the Black-Scholes option pricing model to determine the fair value of share-based awards granted to employees during the nine months ended September 30, 2022 and 2021, respectively, were as follows:
|  | 2022 |  | 2021
Expected stock price volatility |  | 87.02% |  | 97.50%
Risk-free interest rate |  | 2.17% |  | 1.03%
Expected term (in years) |  | 5.95 |  | 5.77
Expected dividend yield |  | — |  | —
The following table summarizes the share-based award activity for the periods presented:
| Number of Options |  | Weighted Average Exercise Price Per Share |  | Weighted Average Remaining Contractual Term (years)
Outstanding at January 1, 2022 | 506,691 |  | $ | 5.68 |  |  | 9.3
Granted | 890,058 |  | $ | 1.85 |  |  |
Forfeited | (55,245) |  | $ | 2.52 |  |  |
Outstanding at September 30, 2022 | 1,341,504 |  | $ | 3.27 |  |  | 9.1
Vested and exercisable at September 30, 2022 | 275,061 |  | $ | 5.90 |  |  | 8.5
Vested and expected to vest at September 30, 2022 | 1,341,504 |  | $ | 3.27 |  |  | 9.1
The weighted average fair value of share-based awards granted during the nine months ended September 30, 2022 and 2021 was $1.38 and $3.76, respectively. As of September 30, 2022, the unrecognized compensation cost related to outstanding share-based awards was $1.9 million and is expected to be recognized as expense over a weighted-average period of approximately 2.25 years. Restricted Stock Units The Company issues RSUs to employees and consultants that generally vest monthly over one to three-year periods. The fair value of an RSU is equal to the fair market value price of the Company’s common stock on the date of grant. RSU expense is amortized straight-line over the service period. The Company recorded share-based compensation expense of approximately $10,000 and $25,000 in research and development expense for the three and nine months ended September 30, 2021, respectively, related to RSUs. There were no RSUs outstanding as of September 30, 2022 or December 31, 2021.

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